Open - Ina

Notes to the financialstatementsFor the year ended 31 December 2007 (all amounts in HRK millions)1. GeneralHistory and incorporationThe company, INA - Industrija Nafte d.d. Zagreb (INA),also known as INA d.d. (Parent Company), is a joint stockcompany, with the Republic of Croatia being a majorshareholder. INA was founded on 1 January 1964 whenthe operations of OilGas (oil and gas exploration andproduction) were merged with those of the refineries ofRijeka and Sisak.By the end of that decade INA had expanded to include theZagreb refinery, Trgovina (a domestic trade organisation),the OKI and DINA organic petrochemical operations andthe Kutina fertiliser plant. In 1974, INA was transformedinto a “complex organisation of associated work” or“s.o.u.r.”, a step which also involved the formation ofa number of separate companies. The organisationcontinued in this form until 1990 when, under the termsof Law (Official Gazette 42/90 and the 61/91 supplement),INA became a state-owned enterprise.In 1993 INA became a share based company pursuant to aDecree published in the Official Gazette No. 60/93.Effective 31 December 1996, the Company signed afinancial restructuring agreement with the DepositInsurance and Bank Rehabilitation Agency of the CroatianGovernment, whereby INA divested the majority ofits interests in petrochemicals, fertilisers, tourism andbanking in consideration for the assumption by theAgency of certain long-term debt and interest liabilities.Effective 11 March 2002, the Croatian Government acquiredthe Company’s subsidiary, Gasacro d.o.o., together with a21.37 % interest in JANAF d.d., the company which owns andoperates the Adria pipeline system, in consideration for assumingUS$ 172 million (HRK 1,438 million) of the company’slong-term debt with the London and Paris Clubs.On 19 March 2002, the Croatian Parliament passed theLaw on the Privatisation of INA (Official Gazette 32/02),governing INA’s privatisation process by allocating INA’sshares to several target Groups. Under this legislation,up to 25% plus one share were to be sold to a strategicinvestor, 15% of shares were to be sold on the basis ofpublic tender, Croatian war veterans and members of theirfamilies were to receive up to 7% without consideration,up to 7% were to be sold to present and former employeesof INA Group companies and the remaining shares wereto be sold or exchanged depending on the prevailingmarket conditions. The remaining shares were to beexempted to the extent necessary for the compensationto the original, former owners. The Republic of Croatia willmaintain ownership of over 25% plus one share of INA,which will be privatised once Croatia becomes a memberof the European Union.The sequence and progress of individual privatisationstages were determined by decisions of the CroatianGovernment, agreed to by the Croatian Parliament(Official Gazette Nos. 47/02, 77/04, 66/05, 104/06, 113/06,122/06, 129/06, 77/07, 94/07 and 103/07).During 2002, the Government solicited for, and received,bids from a number of parties interested in acquiring astrategic investment of 25 % plus one share of INA. On 10November 2003, a transaction was completed wherebyMOL Rt (MOL) acquired 25 % plus one share of INA.In 2005 7%, or 700,000 INA shares, were transferred tothe Croatian Homeland Independence War Veteransand Their Family Members’ Fund without any fee, inaccordance with the decision of the Croatian Governmentof 12 October 2005, adopted by the Croatian Parliament(Official Gazette 122/2005).90 Financial report